In mysteries, the most common thought for a competent detective is the question, “who benefits?” As previously posted, General Motors is meeting with Nissan/Renault to discuss a possible alliance or even merger. I immediately asked the question when I read the bombshell and agree with most analyts there’s no real benefit for any party.
In mysteries, the most common thought for a competent detective is the question, “who benefits?” As previously posted, General Motors is meeting with Nissan/Renault to discuss a possible alliance or even merger. I immediately asked the question when I read the bombshell and agree with most analyts there’s no real benefit for any party.
Forbes’ Jerry Flint covered most of my thoughts in his article, Global Motors?. Cost savings? Does Kerkorian really think Ghosn can really cull GM’s brands and plants without backlash from dealers and the union? The General is still reeling with lawsuits from its closure of its Oldsmobile brand. What about the logistics of determining which facilities manufacture what products? States Flint:
So whose plants get closed? Shut German GM plants and supply that market with French-made Opels? Close Michigan plants and supply dealers with Nissans made in Tennessee but badged as Chevys? Lay off the engineering staffs where? France? The U.S., Japan? Which dealerships get combined or closed?
Scratch savings.
But all of the above scenarios can be resolved if the automakers have enough time. Time. Many merger supporters point to a speedy resolution to the three automakers’ problems by the merger. Uh, what universe do these folks live in? The fruits of a successful merger take years to ripen. Look at Nissan/Renault and DaimlerChrysler. We’re looking at least three years if not much, much longer.
Scratch time.
Another benefit for such a merger would be size. The three automakers would dominate the market with a 25 percent share globally. The automakers could use each others factories to build their vehicles: Nissan could build its light trucks in the U.S., for example. Again, I question if the hassles with retooling or the unions will make it worth it. And GM’s in the process of downsizing its facilities. Flint also has strong doubts about global sharing. GM already has a bad reputation for its “badge engineering” policies. I can’t imagine how the brands would be affected if a Cobalt looked like a Sentra or vice versa.
Scratch size.
So who does benefit? Personally, I agree with the analysts: Kerkorian. The maverick GM shareholder who orchestrated the possible merge is known to be displeased with GM head Waggoner and the company’s pace to stabilize itself after its multi-billion lost a couple of years ago. He has openly endorsed Ghosn and would not hesitate to nominate him for GM CEO if given the chance. The alliance would either land him Ghosn or light a fire under Waggoner’s feet to speed GM’s recovery.
GM and Nissan/Renault are meeting today and the industry is holding its collective breath. As I wait, I’m reminded of another saying: “May you live in interesting times.

3 comments so far
I tell you who will not be benefitting and that is the employees of these three manufacturers.
Can you imagine the job losses that are likely to happen should this event ever occur?
I can understand why this possible relationship is being examined, but I honestly cannot see if happening.
However, of course anything is possible and nothing lasts forever, but am I right in thinking that Renault is still part state owned, can anyone qualify that?
I supply Renault lease and Vauxhall lease vehicles as well as Nissan vehicles, in my mind this would simply restrict the choice available for the consumer.
July 13th, 2006 at 5:34 pm
It a crying shame that you have to lose some jobs to protect others.
A merger is all about making these brands stronger, it might be that if they stay on their own they might not last the length of time.
March 13th, 2007 at 1:12 pm
We supply contract hire offers on all of these brands and all this talk has only made our offers more competitive.
June 27th, 2007 at 9:40 am
Leave a Comment
You must be logged in to post a comment.